In-depth: BP’s callous disregard for the Gulf and its people

This is the third and final installment in my in-depth report on how the Gulf is still suffering from the impact of BP’s recklessness. You can read the first two parts of the serieshere and here:

Former Sarasota motel owner Dave Arnsby feels that he’s been victimized by BP – not once, but twice. When the Deepwater Horizon catastrophe spewed some 5 million gallons of crude oil into the Gulf in the spring of 2010 and the news was filled with images of soiled birds and massive slicks, Arnsby’s Country Inn and Suites lost 25 percent of his business and he went into foreclosure, losing his entire investment. In 2012, the businessman was weighing the best way to recoup some of his loss when he learned that BP had restarted its internal claims program. This was meant to be a way for those who suffered legitimate losses to receive compensation as quickly as possible and also avoid the hassles and added costs of working through the legal system.

“Every single article said, ‘We will pay all legitimate claims,’” Arnsby recently told New Orleans TV station WWL, speaking about his ordeal. He said he’s learned about the internal claims program through the British oil company’s website, part of a barrage of advertising and other publicity about BP’s supposed determination to make things right in the Gulf. “And I am a perfectly legitimate claim, fully documented, in an industry that was the most impacted in the state of Florida.”

The process proved not to be as reassuring as Arnsby – who said he lost his life’s savings and thus his retirement dreams in the hotel’s collapse – expected it to be. First, BP told him and his attorneys that he could only receive compensation for the revenue he lost during those nine months – and not for any of his $4.5 million capital investment in the lodging business. Then, in June, BP made a shocking and unexpected announcement – it was abruptly shutting down the internal claims program altogether. Arnsby would get nothing – not through this supposedly expedited route, anyway – and neither would some of an estimated 10,000 Gulf Coast business owners who’d been counting on the program to make good their considerable losses due to the oil spill.

“They have everything they need to settle my claim, and it’s a point-blank refusal,” a stunned Arnsby told the TV station. Indeed, statistics showed that through the spring BP had paid out a paltry $12 million through its much-ballyhooed internal claims, a tiny sliver when compared to some $3.8 billion paid through its parallel legal settlement. Among the many claimants left in the lurch by BP’s surprise decision to close the program are owners of BP gas-station franchises who were boycotted by consumers furious over the oil company’s environmental crimes, other energy rivals who were harmed by a Gulf-wide drilling moratorium, and seafood processors who believed the terms of the internal program would be more beneficial. These, and many more, felt the sting of BP’s callousness all over again.

Yet when BP was pressed by reporters to explain why the internal claims process was closed, its answer was remarkable: The program, it insisted, was under-utilized. BP vice president Geoff Morrell claimed that “very few claims were being submitted through the BP Claims Programs when this decision (to close it) was made.” The company has also maintained that those – like Arnsby – who still have claims against BP can pursue them individually.[ii]

But to most, the decision by BP to close its internal claims program is seen as one more part of a larger campaign to renege on its commitment to the Gulf, hoping to save billions of dollars in the realization that the economic damage it caused is far more extensive than it believed when the spill first occurred in 2010. Last year, the company reversed course and sought, quite unsuccessfully, to convince the judiciary to undo BP’s sweeping settlement with Gulf business owners and residents, after it became clear that payments would greatly exceed the initial $7.8 billion estimate. Even worse, the oil giant, its new attorneys and its massive PR machine actually sought to single out and ridicule individual claimants – most famously the celebrity chef Emeril Lagasse, who received an $8 million payment for the money his New Orleans restaurants lost during the spill, money that BP’s ad had the nerve to claim was “a fictional loss.” The purpose of this and similar, truly unprecedented ads was clearly to intimidate others seeking legitimate claims.

Over the last year, BP has actively been seeking to break its promises to the people of the Gulf and escape billions of dollars of its financial obligations. This is unconscionable from both a legal and a moral standpoint, but it is appalling for one other reason. As we have previously documented, the Gulf of Mexico is still sick – its beaches bombarded by tar balls, its marine life diseased and depleted, its 2010 cleanup workers still reeling from headaches, nausea and other symptoms. BP’s closure of the internal claims process is just one more example of its efforts to fool people about the true nature of the ongoing problems in the Gulf region. It is one more issue that cries out for a full public airing, so that the American people can learn the facts.

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